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Source: http://www.haaretz.com/hasen/spages/344500.html
The Palestinian Economy Did Not Collapse
(Ha'aretz) - Avraham Tal During the three years of violence, the gross domestic product of the Palestinian economy shrank 30-50%. The Israeli GDP shrank by 1-2% over the same period. Three million Palestinians have a GDP of $5 billion versus a GDP of $110 billion for six million Israelis. The PA continues to provide services to the education system (a million students) and the health system (22 hospitals) and to pay the salaries of some 130,000 public employees (including security bodies) from a budget that is based mainly on transfers from the Israeli government - customs and VAT collected for the PA - and support from Arab governments, which donated about $500 million in each of 2001 and 2002. The functioning of the PA depends on the continuation of these transfers.